Accounting on Tap

BUSINESS OWNERS NAVIGATING COVID-19 BY DAN BERGS, CPA

If you ask a bar or restaurant owner to describe the last few months in one word, you may hear: terrifying, frustrating, stressful, exhausting or unexpected.

The last few months have certainly been challenging for businesses and, unfortunately, business is going to continue to be a challenge in the near future. But as with most hardships, these obstacles come with opportunities for learning. In fact, let’s reflect on some things we learned in recent months, such as the importance of cash flow, safety measures, government programs and membership organizations.

Producing cash flow became essential when businesses were closed to the public very quickly. Carryout and delivery became instant options for some taverns offering food, yet they aren’t generating the same cash flow as being fully open to the public. Many business owners saw cash flow reduce to close to zero and had to consider closing down their businesses.

Businesses need cash flow to cover their fixed costs (like rent and utilities). Managing inventory also continues to be crucial for businesses. Making up for lost revenue is extremely difficult in the service industry. Many restaurants and bars that did not have significant cash reserves struggled and are continuing to struggle.

New safety measures were also put in place. Business owners are first and foremost concerned about the health and safety of their employees and customers. It is important for business owners to keep in mind that the safety measures they establish should make employees and customers feel safe. Different individuals are more cautious, so it is important to create detailed procedures to ensure that everyone coming to your business feels protected. There are several government programs that have been critical for assistance during COVID-19. Paycheck Protection Program loans, for example, were huge for businesses. This forgivable loan program helped many businesses cover payroll and facility costs for a couple of months, and helped prevent many businesses from having to close their “Let’s reflect on some things we learned in recent months, such as the importance of cash flow, safety measures, government programs and membership organizations.”

doors. The Small Business Administration (SBA) also offered another low-interest and long-repayment term loan program for Economic Injury Disaster Loans (EIDL) to assist with working capital. On the state level, the Wisconsin Economic Development Corporation (WEDC) provided $2,500 grants to assist 30,000 small businesses in Wisconsin. There may well be additional programs authorized in the near future, too.

Membership organizations are essential while navigating COVID-19 as well. As a matter of fact, it’s membership organizations like the TLW that are notifying their members of the many governmental programs that have become available. The Tavern League, for instance, is doing a terrific job of posting information on governmental programs, and trying to lobby to make governmental programs as easy as possible for their members to navigate.

Communicating with other business owners on how they are dealing with safety measures oftentimes comes via membership organizations. Information sharing with other businesses is invaluable during these challenging times so we can all help each other.

Using resources wisely is vital for business owners right now. Take advantage of any programs available to assist your business financially. And always remember to do your best to keep employees and customers safe. Specific protocols and instructions on your website, or signs with instructions at your

business can help effectively implement these protocols. Membership organizations are proving themselves invaluable by coming through to help business owners. As we all work to get through this trying time, support your local taverns and raise your glasses to the business owners who have persevered through these unprecedented conditions. TLW

Dan Bergs, CPA, is a supervisor in the tax and business services department with Wegner CPAs LLP. The firm has offices in Madison, Baraboo, Waukesha and Janesville. This article is not intended to give complete tax advice, but a general review of subject matter. For more information, please contact Bergs at (608) 442-1986 or dan.bergs@wegnercpas.com.